Proprietary estoppel – Constructive trust – Appellants befriending and assisting deceased – Deceased promising to leave properties to appellants – Deceased intestate – Judge awarding £20,000 to appellants – Whether proprietary estoppel of “bargain” type arising – Whether constructive trust arising – Whether appellants entitled to transfer of properties – Appeal dismissed
The respondent was the cousin of the deceased and the administrator of his estate. The appellants were a married couple who befriended the deceased in his later years. The deceased was unmarried and had no children. He was unemployed and he began to neglect himself following the loss, in 1992, of two people who were close to him. The appellants assisted him with his day-to-day affairs, shopped and cooked for him, helped him to obtain medical attention and gave him money. On one occasion, when the water pipes burst at the deceased’s home, he went to live with the appellants for four months while they arranged to have the problem repaired.
The deceased owned two properties: no 43, where he lived, and no 45. On several occasions, he stated his intention to leave both properties to the appellants and, during his lifetime, he allowed the first appellant, a music teacher, to give music lessons in them. The appellants carried out refurbishment and soundproofing works to no 45 to make it more suitable for that purpose. The respondent contributed money towards those works.
The deceased died intestate in 2003. However, a written note was found in which he stated that he was leaving the two properties to the appellants. Those properties, valued at a total of £280,000, comprised almost the totality of the deceased’s estate. The appellants brought proceedings for a declaration that the properties were held in trust for them. They relied upon either constructive trust or proprietary estoppel.
The judge found that the appellants had largely acted out of sympathy and friendship, rather than in reliance upon the deceased’s statements regarding the property, and that the detriment that they had incurred in the form of financial expenditure was to a certain extent offset by the benefit that the appellants had received from the use of the properties. He found that the appellants’ expectations with regard to the two properties were out of all proportion to the detriment that they had incurred, and that the equity that had arisen in their favour could be satisfied by an award of £20,000.
On appeal, the appellants contended that a proprietary estoppel had arisen of the “bargain” type identified in Jennings v Rice [2002] EWCA Civ 159; [2003] 1 P&CR 8 and 100, in that there was a mutual understanding in reasonably clear terms, falling short a contract. They submitted that the court should accordingly fulfil their expectations by awarding them the two properties.
Held: The appeal was dismissed.
The case did not fall within the “bargain” category of proprietary estoppel in Jennings. The type of case there described was one where the claimant’s expectations and the element of detriment were defined with reasonable clarity. In the instant case, the element of detriment was not defined since none of the detrimental acts upon which the appellants now relied had been required by the deceased in return for his promise. There was no bargain or other consensual arrangement such as would bring the case within the bargain category.
Nor was this a case where equity would impose a constructive trust. The court was not engaged in identifying the true beneficial owners of the properties or the size of their beneficial interests, but in determining how it should satisfy the equity to which the appellants’ detrimental reliance upon the deceased’s promise had given rise.
The judge had been entitled to find that the appellants’ expectations were out of all proportion to the detriment that they had incurred. In assessing that detriment, it was not possible to leave out of account the benefits that the appellants had likewise received. The judge had been entitled to find that an award of £20,000 would satisfy the equity in favour of the appellants.
Rosana Bailey (instructed by Pedro Emmanuel) appeared for the appellants; Fenner Moeran (instructed by Wellers) appeared for the respondent.
Sally Dobson, barrister
